The business, which is attempting to renegotiate key rights deals as it looks to slash costs to stay afloat, is understood to be considering calling in the administrator as it grapples with a funding shortfall thought to be about £100m. Setanta has about 1.2 million UK direct subscribers, but needs 1.9 million to break even.
Setanta is understood to have missed a £3m payment to the Scottish Premier League last week. It is also understood to have to pay the English Premier League about £30m later this week as part of its TV rights deal.
Prominent among the options being considered is a restructuring through which Setanta would wholesale its channels instead of retailing them direct to Sky and Top Up TV customers as it does now. Setanta already wholesales its channels to Virgin Media: customers of the cable-TV provider gain the channels as part of its top TV package, XL, at no additional cost.
While such a move could mean Setanta receives less revenue than by selling its channels direct to subscribing customers, a wholesaling move could open up a potentially much larger market by relying on Sky's marketing clout to sell its channels.
It would also allow Setanta to save millions of pounds by slashing its marketing and customer service functions, as well as ending its encryption payments to Sky and Top Up TV.
Analysts believe that savings accrued through a wholesale move could outweigh its losses. However, Sky is key to this option, which, as by far the biggest pay-TV provider in the UK, would determine the success of the wholesaling option.
It is understood that Setanta and Sky executives have already discussed the idea of the satellite pay-TV group wholesaling Setanta channels.
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